Page 49 - BusinessWest January 24, 2022

Policy water shutoff
because you never know who’s going to sue you.” Some people feel they don’t need an umbrella pol-
icy because the Homestead Act protects them, Long said. But while it prevents creditors from taking a per- son’s home, the act’s protection stops there.
“Without umbrella coverage, if you tried to sell your house while there was a personal-liability judg- ment against you, the creditors could go after the proceeds from the sale,” he noted.
Water damage may top the list of common claims, but Long said dog-bite claims are growing in number. A typical homeowners policy can provide some cov- erage, but he strongly recommends dog owners have an umbrella policy, as the average claim for a dog bite is $40,000 — and people with a dog-bite claim often pay much more for homeowners policies in the future.
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home if you had a claim. We want to make sure the limits on the policy keep up with the cost of rebuilding your house.”
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when a leak
a liability exposure that can be addressed with a sep- arate commercial rider for protection.
“Otherwise, using the example of the music teach- er, if a student or parent slipped and fell, the teacher would have no protection,” Vassallo said.
Home ownership brings with it plenty of physical hazards. Insurance companies have begun offering protection for virtual hazards such as identity theft and cyberattacks.
Long said cyberattacks are growing at a rate of 200% every year. One of the top schemes is phish- ing — when a fraudster sends an e-mail that appears to be from a reputable company and encourages the receiver to click on links that compromise their secu- rity. But cyberattacks have moved away from laptops and phones and can now impact other areas of the house.
is detected,” Woodbury said. “Insurance companies have begun
offering discounts to homeowners who install these.” Damage from flooding is not covered under a tra-
ditional homeowners policy. Insurance companies define flooding as water from the surface and below, usually entering through the foundation of a house. If a homeowner has a mortgage and their house is in a high-risk zone for flooding, they are required to have flood insurance. Long pointed out that chang- ing weather patterns may require a new way to think about flooding.
“Most people figure, if they are not near a river
or other body of water, they’re OK,” he said. “If we received 42 inches of rain and your house is on a hill, it could still receive flood damage that would not be covered by a traditional insurance policy.”
Woodbury added that anyone can buy flood insurance, and if a house is not in a high-risk zone, the homeowner will receive a preferred rating and a lower price for the coverage. “It’s available to every- one, and we’ve been encouraging people to consider it.”
In addition to covering the dwelling unit, home- owners policies will also cover personal property — up to a point. If there are special items such as expen- sive jewelry or fine art, the best approach is to add a coverage rider for those items. As an example of why riders make sense, Vassallo gave an example of some- one who owns a $75,000 baby grand piano.
“If you had a total loss, such as a fire, and your content limits are $200,000, replacing the piano would take a huge chunk of that $200,000, leaving you a much smaller balance to cover everything else,” she said. Thus, purchasing an inexpensive insur- ance rider for the piano gives it full coverage with
no deductible, and it no longer affects the personal- property limit. “So, it becomes a separate item that we want to keep separate.”
Another type of policy associated with homeown- ers insurance is umbrella coverage. These are per- sonal liability policies that provide coverage when the limits of a homeowners and auto insurance policy aren’t enough to pay a claim.
Umbrella coverage was once thought to be neces- sary for homeowners who have a dog, a swimming pool, or a young driver. Vassallo said. But with pay- ments for personal-injury claims going higher all the time, everyone should consider the added protec- tion of such a policy. “We even suggest it for renters
Mergers
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And not just expertise, but relationships.
“We don’t want to be big just to be big; that think-
ing was 10 or 15 years ago. Now it’s getting big to be good, or just being good ... and part of that model is having independent expertise, services, and claim advocacy like never before.”
He noted that HUB has won some national awards for its COVID-related communication about how the industry should react and deal with all the different challenges the pandemic has wrought. “We’ve had some competing brokers, large companies, bigger than us, grabbing those materials for their customers. We didn’t protect it; we shared it.”
Dowd agreed that M&A activity often focuses on what it brings to customers, from a broader carrier
If you’ve upgraded to granite counters, it will now cost more to rebuild your
For many years, companies have maintained lists of dogs they will not insure under a homeowners policy. Woodbury pointed out that the list is driven by the number of claims they see for certain breeds.
“The lists change, too,” she said. “Because com- panies have seen fewer claims on German shepherds and huskies, they have come off some lists.”
Before purchasing a dog, Long recommends homeowners call their insurance agent, especially if they are not set on a particular breed. “Your agent can give you the current list of dogs the companies will not cover with insurance.”
Remote Control
While many people work from home these days, that work can take many forms. A person working full-time for a company is different than someone who operates a home-based business. Vassallo said homeowners policies are not intended to protect business exposure, so a person who runs a business out of their home needs to see their agent for a rider to their home policy.
Liability can become an issue if customers come to the home. It’s not unusual for tax accountants, music teachers, and others to have people at their home for business reasons. In insurance terms, that’s
“Not every prospective agency is a good fit for acquisition. We know the metrics we look for, and we have to check the boxes before we start to move forward. We can’t grow for the sake of growing.
mix to specific expertise. While the mergers with Lus- sier and Wilcox focused more on the shared culture, he added, any benefit to customers is a factor when
“Hackers are known to access data through WiFi- enabled thermostats,” Long said, adding that those who own WiFi-enabled refrigerators have also expe- rienced attacks by hackers who use the appliance to mint cryptocurrency, such as bitcoin. “Many policies offer identity theft, and we are now strongly recom- mending our clients to add cyber protection.”
Before a homeowners policy comes up for renew- al, agents will contact their customers to make sure their coverage stays up to date. It’s important for insurers to know about improvements such as a kitchen renovation.
“If you’ve upgraded to granite counters, it will now cost more to rebuild your home if you had a claim,” Woodbury said. “We want to make sure the limits on the policy keep up with the cost of rebuilding your house.”
Obviously, homeowners are not looking to pay more for coverage, and there are options for those who are interested only in price. Vassallo tries to help her customers understand why having sufficient cov- erage is so important.
“This is probably the largest asset they will ever own,” she said, “so let’s make sure we properly pro- tect it.” u
considering an acquisition.
Nationally, those mergers and acquisitions will
continue to be a major story in the insurance world. After five straight years of setting new records for M&A activity, Trem doesn’t see a major slowdown in 2022.
“Buyers and investors are continuing to push their way into the marketplace,” he wrote. “If anything, the pandemic reminded the financial community what
a great investment the insurance distribution space is and that demand is greater than ever before. It is
a very favorable seller’s market because there is still more demand than there is quality supply.” u
Joseph Bednar can be reached at [email protected]
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